cepa - state of the pipeline industry

1

State of the Canadian State of the Canadian Transmission Pipeline Transmission Pipeline

IndustryIndustry

July 10, 2011July 10, 2011

222

Ensuring a safe and reliable pipeline industry in Canada

Outline

About CEPA Pipeline infrastructure in North America Our key issues and priorities

– Pipeline safety

– Damage prevention

– Market access

– National energy strategy

333


About CEPA Transport 97% of the crude oil and natural gas

produced in Canada to markets across North America

Operate over 100,000 kilometres of pipeline in Canada and the United States

CEPA members expect to invest in multi-billion dollar expansion projects in the next 15 years

444


CEPA Members

555


666


777


Safe and Efficient Energy Highways■ Move 1.2 billion barrels of crude and refined

products and 5.5 trillion cubic feet of natural gas each year

■ Pipeline are underground and safe■ Ruptures on pipelines are rare

■ Between 2002 and 2009■ Ruptures on federally regulated pipelines averaged slightly

more than one per year; a decline of 55% from the previous eight years

■ Average annual volume released from liquids pipelines was just two litres for every million litres transported … 99.9998% of the product was transported safely

888


Canadian Industry World-Class Safety Record

999


Significant Failures Remain Low

101010


Pipeline Monitoring and Maintenance■ Monitoring

– 24/7 monitoring at remote control centres using sophisticated computerized sensing and control systems

– Equipped with automated leak detection alarms and shut-down devices

– Regular visual surveys of pipelines by aerial and ground patrols

– Sophisticated “in-line” inspection tools (pigs) inspect the inside of pipes to identify changes

■ Maintenance– Preventative maintenance programs including constant pipeline

excavations and repairs

111111


Video of Inspection Tool

121212


Key industry initiatives to ensure safety

Committed to a safety culture Development of Integrity First program Apply effective management systems Damage prevention advocacy Converge on industry leading practices Develop and deploy appropriate advanced

technology Advance national standards

131313


141414


External Damage: Growing Safety Risk Activity within close proximity to pipeline poses

greatest risk to public safety- External interference was the cause of six failure incidents

and 40 damage incidents (no release of service fluid) on CEPA pipelines during the period 2002-2009

- External interference was the fourth most common cause of failures

- All CEPA external interference failures during the period 2002-2009 were caused by third parties

Increased public education is essential In spite of regular surveillance, not all activities

on the ground can be controlled by pipeline operators

151515


Damage Prevention

Three key advocacy areas:– Establishment of a 3 digit call number across Canada

– Introduce mandatory one-call across Canada

– Introduce financial penalties for parties undertaking un-authorized digging on or near pipelines

161616


Market Access

171717


Pipeline Development Issues

Development of new pipeline assets is critical to open new markets for Canadian oil and gas

New natural gas supply needs to be connected to existing pipeline systems

The industry makes, and must continue to make, huge investments in pipelines to provide cost competitive infrastructure

Infrastructure = Choice & Responsiveness = Energy Security

181818


Market Access

For the Canadian pipeline industry to continue to strive, it needs access to existing and new markets– Canada is the number one supplier of oil and natural

gas to the U.S. and must remain so

– Canada is the ideal energy partner for the US: business friendly, politically stable and has abundant source of

energy strong, transparent regulation CEPA member safety track record is second to none

– Access to the Asian Pacific market is a key strategic outlet

191919


Energy Infrastructure Investment Forecast$26 trillion USD – Global Energy Sector, next 20 years (IEA, 2009)

202020


Pipelines: Delivering a Safe Source of Energy to the United States

Source US Dept of Energy

21

2009 Canadian Crude Oil and Equivalent Supply and Disposition

(Thousand Barrels/Day)

78.6

218.9

PADD II

PADD III

PADD V PADD IV

PADD I

30.2

1945.4

2,725.8

23.9 1.

9

276.7

15.0

1167.3

252.8

51.5

68.6

372.9

365.4

106.2

47.7417.

0

179.2

BC

AB

SK

MB

ON

Norman Wells

Hibernia/Terra Nova

Sable

Canadian Production

Source: NEB, EIA

3,214 62

2

3,672

8,440

1,723

2,696.4

Delivery of Canadian Production

809 Imports into Canada

2,034 Canadian Refining Capacity

432.7QC

NB/NL/NS/PE

503.8

536.4

476.7

128.3

450.3

66.6

Legend

91.8

31.4

13.8

Source: NEBOctober 2010

40.2

222222


Pipelines: Delivering a Safe Source of Energy to the United States

Source: US Dept. of Energy

23

AECO HUB

Prudhoe Bay

Anchorage

Norman Wells

Whitehorse

Prince Rupert

Kitimat

Prince George

Taylor

Rainbow Lake

Zama

Fort McMurray

LloydminsterEdmonton

HardistySundre

Kerrobert

Cutbank

Great Falls

KamloopsVancouver

Anacortes

Olympia

Portland

Seattle

Spokane

Empress

Regina

WinnipegCromer

Gretna

Mandan

Clearbrook

Thunder Bay

Superior

St. Paul

LockportChicago

Moosonee

Timmins

Sudbury North Bay

Ottawa

Montreal

Quebec City St. John

Halifax

Port Hawkesbury

St. John’s

Portland

Boston

Philadelphia

Warren

Oakville

Sarnia

Nanticoke

DetroitToledo

CantonLima

Catlettsburg

Memphis

Patoka

Robinson

WoodRiverMcPherson

El Dorado

Ponca CityCushing

Borger Tulsa

Coffeyville

Wynnewood

Colorado City TylerEl Dorado

New Orleans

St. JamesCorpus ChristiThree Rivers Freeport

HoustonPort Arthur

Lake Charles

LongviewBig Spring

Artesia

El Paso

Billings

Casper

Salt Lake City Sinclair

Cheyenne

Denver

Guernsey/Ft. Laramie

Long Beach

Los Angeles

Torrance

BakersfieldSanta Maria

Avon

San Francisco

Sunray

Source: NEB

2009 Canadian Natural Gas Disposition – Distribution by Market (Billion Cubic Feet/Day)

14.8 Canadian Production

1.8 Delivery of Canadian Production

1.9 Imports into Canada

Legend

HENRY HUB

Western Canada

14.8

Total Canadian Consumption

7.8

East Coast Offshore 0.4

Imports From US1.9

0.8

1.81.3

1.50.5

Oil Sands 1.2

1.3 1.0

0.2

Other US Export Points

0.6

October 2010

242424


The Opportunity

Canada’s pipeline industry can be a key element in employment and GDP recovery

Bringing new projects online near term = – Lower costs for big projects– Support for key industries

Private sector projects bring a multiplier effect throughout the economy

Investments made now ensure infrastructure is in place when investment reoccurs

252525


The Regulatory Imperative

Regulatory framework must deliver:

Coordination between and within governments, including– One project, one assessment consolidation for new projects

– Coordination of agencies and departments to eliminate duplication, streamline requirements, and share knowledge and expertise

Timely and effective processes

Balanced decision making, integrating environment and economy

– Using facts and expert decision making throughout the life of federally regulated facilities

Clear accountability and transparency of government

Effective Crown Consultation

– Fully addressed across departments and jurisdictions

– Separates assessment from economic negotiations

262626


Our Asks

Projects that are determined to be in the public interest must proceed responsibly– Focus on outcomes

Cost of those projects is managed so as not to burden Canadian consumers and investors with unnecessary cost– Balance is needed to both protect the Environment

and the Economy while meeting Energy needs (EEE)

Development timelines are predictable and review processes are effective and efficient– Invest in things that matter, not in things that don’t,

and know the difference

272727


National Energy Strategy

282828


National Energy Strategy

CEPA fully supports the development of a national energy strategy for the following reasons:– Energy is a strategic asset

– Our energy sources need to receive the best value possible in an increasingly competitive global energy market

– The strategy needs to support the underlying attribute of the Canadian economy that we are a trading nation

– Need to balance economic, environmental and social expectations of Canadians

– Innovation, regulation, GHG emission reduction strategies and energy efficiency are key components to Canadian know-how

292929


Other Key Issues

Aging infrastructure– Pipeline abandonment

Project development costs Technological advances Rail vs. pipeline

303030


For more information please contact:

Philippe ReicherVice President, Communications & Stakeholder Relations

Canadian Energy Pipeline AssociationSuite 1860, 205 - 5th Avenue S.W.

Calgary, Alberta T2P 2V7

Tel: (403) 221-8778

www.cepa.com

cepa - state of the pipeline industry

Documents

pipeline monitoring

year pipeline

cepa pipeline infrastructure

kilometres of pipeline

pipeline operators

canadian pipeline industr

cepa pipelines

existing pipeline systems